Battle looms on energy saving schemes

Power companies have launched an attack on the patchwork of state energy efficiency regimes. Photo: Andrew Quilty

Mathew Dunckley and Jason Murphy

Key points

Government energy efficiency programs under attack by the industry.

State schemes said to be doubling up on national initiatives.

Government-mandated energy efficiency programs that have forced power companies to help customers cut electricity consumption are under concerted attack from the industry, which claims the schemes are inefficient and unnecessary.

Power companies have used a review of Victoria’s Energy Saver Incentive scheme to launch a broader attack on the patchwork of state regimes that have led to retailers to give away more efficient light bulbs with the aim of cutting their energy consumption and reducing greenhouse gas emissions.

An Australian Bureau of Statistics study, released on Tuesday, found that found that 31 per cent of households made an energy efficient improvement in the 12-month period of the study.

EnergyAustralia regulatory manager Joe Kremzer said the national carbon price, a national renewable energy target and a more mature market for energy efficient products meant state schemes were doubling up.

“We therefore consider that white certificate schemes [another name for these types of energy efficiency schemes] in all jurisdictions, including Victoria, should be phased out as soon a practicable,” he said in that company’s submission to the review.

He said that the Victorian ESI inequitably spread the costs of the scheme across all consumers but only benefitted those who took up offers for energy efficient products.

“The notion that customers who are unable to take advantage of scheme activities, such as low income households and renters, should face a higher tariff to subsidise other consumers who are able to make considerable savings is a perverse outcome indeed,” he said.

Less relevant today

Origin Energy manager’s for carbon, wholesale and regulations, Melissa Perrow, said the problems the Victorian scheme was introduced to fix were less relevant today because of other measures such as carbon pricing.

If continued Victoria’s scheme should be harmonised with NSW, she said.

Packaging company Amcor said the introduction of a national carbon price meant “all state-based energy efficiency and greenhouse gas reduction schemes should be wound up as soon as practicable”.

The Energy Supply Association of Australia, which represents generators, called for the scheme to be scrapped. It said barriers stopping people conserving power had diminished, particularly through the introduction of smart meters.

“With this in mind, it makes little sense to try to address the remaining barriers to energy efficiency through a market-based white certificate scheme,” it said.

Energy Retailers Association of Australia chief executive Cameron O’Reilly said the scheme had made a “significant contribution to reducing energy consumption” but it was appropriate to review whether it was the best approach compared with other measures such as a national scheme.

Preference for national system

AGL backed the use of white certificate schemes but voiced a strong ­preference for a national system.

“Each state operates a different energy efficiency scheme. This creates administrative burden for providers operating in multiple states,” its submission said.

The previous Labor federal government was working towards a national system but Environment Minister Greg Hunt said it achieved only “limited success”. He said he would work with state governments to “streamline systems and cut the regulation in this area whilst achieving energy efficiency”.

The Coalition’s Emissions Reduction Fund would “provide significant opportunities for energy efficiency in providing abatement”, he said in a statement.

Victorian Greens Leader Greg Barber accused opponents of the scheme of hypocrisy. “All these companies seem to market themselves as ‘green’ but in the background, they’re working to stomp on anything that reduces pollution,” he said.

Clean Energy Council director of policy Russell Marsh said the system played a “vital role” to reduce power bills and should be kept until there was a national scheme. He pointed out that the carbon price may be abolished.

“If the carbon price is repealed under a future government, the ESI will continue to deliver benefits to Victorian households and businesses.

People with a mortgage were the most likely to make improvements.

It also found the average amount of electricity supplied to NSW dwellings that did not generate their own electricity fell from 6800 kilowatt hours in 2010 to 6000 kilowatt hours in 2012, an 11 per cent fall in the space of two years. A 7 per cent fall was recorded in Queensland over the same period and a 17 per cent fall was seen in Tasmania.

Average weekly household expenditure on electricity and gas is $39. Expenditure on energy for dwellings was equal to over 4 per cent of gross household income for low income households and around 1 per cent for high income households

A spokeswoman for Energy Minister Nick Kotsiras said the government would not comment while it was undertaking the review.

Victorian Employers Chamber of Commerce and Industry business analyst John Griffiths said the system could be better designed to harness the savings on offer out of businesses.